In 2023 the economy of Emilia-Romagna grew by 1.1 percent, a smaller increase compared to the previous year. The data emerges from the annual report on the economy of Emilia-Romagna drawn up by the Bank of Italy. The slowdown was affected by the end of the post-pandemic recovery, the weakening of consumption and that of foreign demand. Investments have decelerated; those in construction were boosted by significant public support. In the agricultural sector, added value decreased by 4.4% compared to 2022, due to the unfavorable climatic conditions that affected the entire region and the flood that hit Romagna in May 2023. In industry it decreased by 1%, with a particularly marked decline in activity in the production of tiles and growth in the food, mechanical and transport sectors. Industrial activity was affected by the unfavorable trend in exports, which in real terms decreased by 2.4%. Value added in construction increased by 5.2%.
Growth – highlights the report – continued to be supported by tax incentives, the remodulation of which, which came into force in 2024, led to an acceleration of works in the latter part of last year. The sector’s activity also benefited from public investments, partly attributable to the implementation of works envisaged by the PNRR. Growth in services was 2.2%, a lower figure than the previous year which reflects the slowdown in consumption. The sectors of the sector showed different trends: tourist presences increased by 2.4%; traditional retail continued to show signs of weakness; the loads of goods handled in the port of Ravenna have instead decreased, affected by the decline in traffic generated by manufacturing.
Multinationals represent a very significant component of the Emilia-Romagna economy, contributing to 40% of the regional added value and generating over 60% of exports and patents, values higher than the Italian average. 91% of industrial and service companies closed their budget at least in balance, despite the increase in financial costs; this share rises to 95% in the construction sector. Profits were favored by a moderately positive, albeit slowing, economic picture and by the modest increase in wages. The resulting strengthening of self-financing allowed companies to reduce bank debt without affecting previously accumulated liquidity reserves. Bank loans to businesses fell 4.7% in December. This contraction reflects the decline in demand for credit (connected with the increase in rates and the economic slowdown) and supply conditions practiced by banks characterized by greater caution.
In 2023 the number of employed grew by 1.1% and has returned to 2019 levels (over 2 million employed). The unemployment rate remained stable at historically low values (5%). Considering employed work, the balance between hirings and terminations was positive and higher than that of 2022; the creation of job positions mainly concerned permanent contracts. In 2023, in Italy, wages established by national collective agreements increased by 2.2%; growth in Emilia-Romagna was similar and in any case lower than the inflation rate (5.2% in the region and 5.7% at a national level). Istat’s projections to 2042 show a substantial stability of the population and its marked aging. This factor could have a significant impact on employment dynamics in the coming years. At current participation rates, the labor force would decline by 130,000.
In 2023, household disposable income at constant prices fell by 0.7%; consumption instead increased by 1.4 but slowed down compared to 2022. The current levels of the latter are higher than pre-pandemic values; on the other hand, those of incomes are still 2.5% lower. Overall, household indebtedness remained unchanged compared to the previous year. On the one hand, credit to
consumption increased, supporting family spending, in particular that on durable goods. On the other hand, the disbursements of new mortgages, following the increase in interest rates, fell by around a quarter compared to 2022, reaching 4 billion euros. This resulted in a reduction in home sales of 12%. At the end of 2023, the average APR on new mortgage loans was 4.5%, up from 3.4 a year earlier.
Household deposits residents in the region decreased by 5.6%. There has been a recomposition of current accounts in favor of savings deposits. The reallocation of savings in favor of less liquid but more profitable financial instruments also led to a transfer of resources from deposits towards securities held for safekeeping by banks, which increased by 23.7%. In December 2023, bank loans to the non-financial private sector they decreased by 3.1% on an annual basis. The riskiness of bank credit showed a slight worsening, although remaining at low levels compared to historical comparisons. Some signs of tension in repayment capacity have emerged, especially for smaller companies and those in the construction industry. The incidence of delays in paying mortgage installments has also increased for families.
Spending by local authorities in Emilia-Romagna has grown, especially that for investments in public works, which increased by 50.7%. The increase is also linked to the implementation of the PNRR: last December, the funds allocated by the Plan to interventions in Emilia-Romagna amounted to 6.4 billion euros. A significant portion of spending goes to public works: the construction sites already started in the region exceed one billion euros. The regional bodies make use of staff with a higher level of education than the Italian average; the share of graduates is 43.9 against the 35.3 average for the country. They also show a greater propensity for digitalization, faster collection management and stronger budget conditions.
In the first quarter of the current year, growth in the North East continued at a moderate rate and in line with the national trend. Operators’ expectations for 2024 remain cautious. On the one hand, economic activity could benefit from the strengthening of world trade and the growth in public spending for the implementation of the PNRR; on the other hand, downside risks remain linked to a possible worsening of geopolitical tensions, which could impact both the disinflation process and the volumes of international trade.
